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The story is set up as the narrator's explanation for why a "draught of cool air" is the most detestable thing to him.

The tale opens up in the spring of 1923 with the narrator looking for housing in New York City, finally settling in a converted brownstone on West Fourteenth Street. Eventually, a chemical leak from the floor above reveals that the inhabitant directly overhead is a strange, old, reclusive doctor. One day the narrator suffers a heart attack, and remembering that a doctor lives directly above, heads there, culminating in his first meeting with Dr. Muñoz.

The doctor shows supreme medical skill and saves the narrator with a concoction of drugs, resulting in the fascinated narrator returning regularly to sit and learn from the doctor, his new friend. As their talks continue, it becomes increasingly evident that the doctor has an obsession with defying death through all available means.

The doctor's room is kept cold at approximately 56 degrees Fahrenheit (13 degrees Celsius) using an ammonia-based refrigeration system, the pumps driven by a gasoline engine. As time goes on, the doctor's health declines and his behaviour becomes increasingly eccentric. The cooling system is continuously upgraded, to the point where some areas are at sub-freezing temperatures--until one night when the pump breaks down.

Without explanation, the panic-striken doctor frantically implores his friend to help him keep his body cool. Unable to repair the machine until morning and without a replacement piston, they resort to having the doctor stay in a tub full of ice. The narrator spends his time replenishing the ice, but soon is forced to employ someone else to do it. When he finally manages to locate competent mechanics and the replacement part however, it is too late.

He arrives at the apartment only to see the rapidly-decomposed remains of the doctor, and a rushed, "hideously smeared" letter. The narrator reads it, and to his horror, finally understands the doctor's peculiarities: Dr. Muñoz was undead, and has been for the past 18 years. Refusing to give in, he has kept his body going past the point of death using various methods, including perpetual coldness.

A Spanish physician of "striking intelligence and superior blood and breeding", he is described as "short but exquisitely proportioned", with a "high-bred face of masterful though not arrogant expression", "a short iron-grey full beard", "full, dark eyes" and "an aquiline nose". He calls himself "the bitterest of sworn enemies to death", and one who had "sunk his fortune and lost all his friends in a lifetime of bizarre experiment devoted to its bafflement and extirpation." Saying he feels a "repugnance" on first meeting Muñoz that "nothing in his aspect could justify", the narrator remarks on "the ice-coldness and shakiness of his bloodless looking hands" and that fact that his breathing was imperceptible.

An H. P. Lovecraft Encyclopedia suggests that Muñoz may have been modeled on Lovecraft's Brooklyn neighbor, "the fairly celebrated Dr. Love, State Senator and sponsor of the famous 'Clean Books bill' at Albany, New York...evidently immune or unconscious of the decay." (HPL: Selected Letters 2.265) This is presumably William Lathrop Love, a Brooklyn physician and freemason who was a state senator from 1923 until 1932.[1]

The unnamed narrator has come to New York to do "some dreary and unprofitable magazine work". He has drifted from one cheap boardinghouse to another before finding that the one on West Fourteenth Street "disgusted [him] much less than the others he had sampled." After being treated by Muñoz, his upstairs neighbor, he becomes "a disciple and devotee of the gifted recluse".

Lovecraft wrote "Cool Air" during his unhappy stay in New York City, during which he wrote three horror stories with a New York setting. In "Lovecraft's New York Exile", David E. Schultz cites the contrast Lovecraft felt between his apartment, crammed with relics of his beloved New England, and the immigrant neighborhood of Red Hook in which he lived as an inspiration for the "unsettling juxtaposition of opposites" that characterizes the short story. Like the story's main character, Shultz suggests, Lovecraft, cut off from his native Providence, Rhode Island, felt himself to be just going through the motions of life.

The building that is the story's main setting is based on a townhouse at 317 West 14th Street where George Kirk, one of Lovecraft's few New York friends, lived briefly in 1925.[2] The narrator's heart attack recalls that of another New York Lovecraft friend, Frank Belknap Long, who dropped out of New York University because of his heart condition.

The narrator's phobia about cool air is reminiscent of Lovecraft himself, who was abnormally sensitive to cold.

Schultz indicates that "Cool Air"'s main literary source is Edgar Allan Poe's "The Facts in the Case of M. Valdemar," described as Lovecraft's favorite Poe story after "The Fall of the House of Usher". Lovecraft had just finished the Poe chapter of his survey Supernatural Horror in Literature at the time that he wrote the short story. Lovecraft, however, stated years later that the story that inspired "Cool Air" was Arthur Machen's "The Novel of the White Powder", another tale of bodily disintegration.

Submitted to Lovecraft's regular outlet, the pulp magazine Weird Tales, "Cool Air" was rejected by editor Farnsworth Wright, a decision that has been called "inexplicable...since it would appear to be just the sort of safe, macabre tale that he liked."[2] It's possible that Wright feared that "its gruesome conclusion would invite censorship". (EXP: An H. P. Lovecraft Encyclopedia)​ Peter Cannon calls "Cool Air" Lovecraft's "best story with a New York setting", proving him "capable of using an understated, naturalistic style to powerful effect."[3]

"Cool Air" has been adapted for film or television at least three times: as a 1971 episode of Night Gallery directed by Jeannot Szwarc with a teleplay by Rod Serling, as "The Cold", directed by Shusuke Kaneko from a screenplay by Brent V. Friedman, it was part of the 1994 Lovecraftian omnibus film Necronomicon: Book of the Dead as a 50-minute black-and-white version. Cool Air, directed by Bryan Moore was released in 1999 as part of the H.P. Lovecraft Collection.